Google pays Apple billions of $ to remain iPhone’s default search bar

Looking at Google and Apple, you will easily assume that both companies are fierce rivals but that is not the case. Google and Apple share a business relationship that forks out billions of dollars from the formers purse into the latter’s purse. This is what reports by CNBC recently revealed. According to the news agency, investment research firm Bernstein reports that Google will be paying Apple up to $3 Billion this year.

A.M. Sacconaghi Jr., an analyst with Bernstein was quoted as saying; “Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B.” “Given that Google payments are nearly all profit for Apple, Google alone may account for 5% of Apple’s total operating profits this year, and may account for 25% of total company OP growth over the last two years.”

This is a good business deal for both companies. In case you are wondering how Google benefits from all this, remember that Google is first a search company that generates revenue from Ads. There is no better way to ensure profit than having a standby search bar on one of the most popular smartphone brands in the world.

Apple’s iOS devices contribute about 50 per cent to Google’s mobile search revenue, according to Sacconaghi, suggesting Google would be unlikely to walk away from the licensing deal even if it suspected Apple would stick with Google as the default search engine anyway, given its huge popularity.